The oil-rich countries of the Gulf Cooperation Council present a misleading picture of affluence. Recent rapid economic expansion is fueled by high oil prices and has triggered growth in real estate and construction, producing undiversified economies that rely too much on expatriate labor and a depleting resource. If these countries can remove institutional barriers that segment their workforces, they should be able to raise living standards, close performance gaps with countries like India and China, and develop economies capable of sustained growth.